BLS: Americans “not in labor force” increased by 8 million+ during Obama’s first term

posted at 11:31 am on January 21, 2013 by Erika Johnsen

As we officially embark into President Obama’s second term today, let’s take a moment to examine the new economic normal with which the voting public is apparently quite comfortable. While we’ve finally, technically fallen below the national eight percent unemployment rate we heard so much about during Obama’s first term, there is a very significant qualifier in that math that communicates nothing really uplifting about where our economy actually stands:

The number of Americans age 16 or older who decided not to work or even to seek a job increased by 8,332,000 to a record 88,839,000 in President Barack Obama’s first term, according to the Bureau of Labor Statistics. …

The increase in Americans opting out of the labor force during Obama’s first term resulted in a decrease in the labor force participation rate from 65.7 percent in January 2009, the month Obama was first inaugurated, to 63.6 percent in December 2012, the latest month reported. Before Obama took office, the labor force participation rate had not been as low as 63.6 percent since 1981, the year President Ronald Reagan took over from President Jimmy Carter. …

When Obama was inaugurated in January 2009, there were 80,507,000 American civilians age 16 or older who did not have a job or seek one. In December 2012, there were 88,839,000—thus, the increase of 8,332,000. …

The wind may very well be at President Obama’s back in terms of public consensus, but many of those pesky economic “headwinds” are still there — and we’ve got nothing but more of the same proposals for still more government spending for ideas to fix it. Four more years!

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Really sad to hear that. I was unemployed for over a year in 2010 and “funemployment” is anything but. We now have 88 million people who have no reason to get out of bed in the morning. It’s demoralizing and dangerous to a person’s mental outlook. A job is a purpose, a sense that you’re needed and productive. The feeling of earning your way and getting something done with your day is the road to happiness. We need to turn this economy, or I believe we’ll see a pandemic of mental health issues in this country.

This is the fact that the average Dem voter can’t seem to grasp. Obama and Co. had a myriad of choices when they came into power. They made some very bad ones: either ideologically-driven choices or maintaining the failing status quo (also a choice).

Well I’m still working. Likely four (or more) years past my estimated/planned retirement date.
I have two college graduates that moved back home.
One with lots of experience with degrees in Ecology & Environmental Biology (no crank remarks he got thru DiffEQ’s, OK?) and he has a Certification in GIS; the other son with a B.S. in Chemistry. Any of you sad sack trolls ever take a series of courses called: Physical Chemistry? Yea, I thought not.
And it don’t look great for either of them.
But hey, it is the Obamugabe way. President 3X Downgrade. FOUR MORE YEARS. He has to finish what he started, right?
Where’s my friggin’ Obowmao Phone and my Free Government Cheese?

I really wonder how many are dropping out into some sort of an underground economy? Regardless, these numbers are only going to get worse as the provisions of Obamacare kick in. More people on part-time employment. The lucky ones may hold down 2 or 3 part-time jobs.

I look for sudden and unexpected events to either bring this to a head, or, overtake the situation entirely.

Listening to NPR this AM, they said they were covering the Corrination … er’ Oath of Office, Innaguration from start to finish. 8 AM to 2 PM today.
Listening to them and their broadcast while I showered was almost unbearable. It was like they were reporting on the Birth of Jesus/Budda & Mohammed all at once. Sickening.
Now we know how truly damaging and detrimental Affirmative Action programs actually are.
I wonder if the soul of America will survive?
Gawd the media has gotten so pathetic & rotten. Menken, Royko, Germond, must be turning over in their graves.

The reduction in the unemployment rate has occurred primarily through the reduction in the labor force participation rate. The labor force participation rate is at 1980 levels. The reduction in the unemployment rate has declined due to a function of the unemployment rate formula not job creation or an improvement in the economy.

Now change the default Unemployment Rate Target from 7.8% to 1%. Then change the Labor force participation rate (CPS)to 58.69% (from the default current rate of 63.6%). Now hit calculate. It will show we can attain a 1% unemployment rate by losing 93 jobs per month provided that the Labor Force Participation Rate drops to 58.69%.

This shows that the drop in the Unemployment Rate isn’t due to job creation rather it is due to the drop in the Labor Force Participation rate. The Unemployment Rate is a totally meaningless indicator in today’s economic climate.

Not all of these former workers are moochers. I am probably considered to be one of these people. I was laid off (we had just moved and I was the last hired) but found another job. But the business closed 2 months later. I eventually found yet another job but was soon seriously injured in an accident. I was too injured to work (head injury) but not injured seriously enough to be permanently disabled. Now I’m teaching in a private home school group in return for having our daughter’s tuition waived. So I guess maybe I’m now part of the underground economy.

To put the point another way, look at the number of people without a job, who last looked more than 4 weeks prior to that month’s CPS survey, and who want a job now (last item of Table A-1 of the monthly CPS), a subset of the number of those not in the labor force.

Let’s start with December 2008, the last full month of the Bush Presidency. Using seasonally-unadjusted numbers (because that’s the proper measure when comparing the same month in multiple years), out of 235,035,000 people who were at least 16 years old and part of the civilian noninstitutional population, there were 5,180,000 people who wanted a job but didn’t have one and hadn’t looked since before mid-November 2008, 80,686,000 who were not a part of the labor force (including the aforementioned 5.2 million), and 10,999,000 who were officially unemployed (out of work and looked for work between mid-November and mid-December).

Fast-forward to December 2012, the last month we currently have figures for. The civilian noninstitutional population grew to 244,350,000 (a 4.0% increase), the number of “officially” unemployed grew to 11,844,000 (a 7.7% increase), the number of those not in the labor force grew to 89,445,000 (a 10.9% increase), and the number of those who want a job but are not counted as unemployed spiked to 6,532,000 (a 26.1% increase).

The number of Americans age 16 or older who decided not to work or even to seek a job increased by 8,332,000 …

The increase in the number of unemployed over the same time period (845 thousand) is ONLY ONE-TENTH as large as the 8.3 million decrease in the labor force, just like the tip of an iceberg, which also reveals only one tenth of its total size.

I have always wondered just how many of these people are actually earning a living in the underground economy. While growing up, I heard about Italy’s economy being off the books to avoid paying taxes. As an adult I have known a few people who not only sruvived but thrived on the off the books economy. Ultimately it Italy, the social safety net was expanded to include these people who showed no “income.” They paid no taxes, per se, and the state propped them up. Now Italy is completely broke, pending bailout by the EU. In the US where we used to value work, I still suspect many of those covered by the safety net are in fact generating income on the “off the books” economy. We are headed the same way as Italy I am afraid.